Jacobs v. Felix Bloch Erben Verlag Fur Buhne Film

• Decision Date: 10 September 2001
• Docket Number: No. 98 CIV. 6623(LBS).,98 CIV. 6623(LBS).
• Citation: 160 F.Supp.2d 722
• Parties: Jim JACOBS and the Estate of Warren Casey, Plaintiffs, v. FELIX BLOCH ERBEN VERLAG FUR BUHNE FILM UND FUNK KG, Grease Promotion GmbH, Theater Des Westens Gemeinnutzlge Betriebs GmbH, Brenner Holding GmbH, Thomas Krauth, and Michael Brenner, Defendants.
• Court: U.S. District Court — Southern District of New York

160 F.Supp.2d 722

Jim JACOBS and the Estate of Warren Casey, Plaintiffs, v. FELIX BLOCH ERBEN VERLAG FUR BUHNE FILM UND FUNK KG, Grease Promotion GmbH, Theater Des Westens Gemeinnutzlge Betriebs GmbH, Brenner Holding GmbH, Thomas Krauth, and Michael Brenner, Defendants.

No. 98 CIV. 6623(LBS).

United States District Court, S.D. New York.

September 10, 2001.

COPYRIGHT MATERIAL OMITTED

Porzio, Bromberg & Newman, P.C., Howard J. Schwartz, Morristown, NJ, for Plaintiffs Jim Jacobs and the Estate of Warren Casey.

Loeb & Loeb LLP, David M. Satnick, New York City, for Defendant Felix Bloch Erben Verlag fur Buhne Film und Funk KG.

Alston & Bird, LLP, Gregory F. Hauser, Karl Geercken, New York City, for Defendants Grease Promotion GmbH, Theater des Westens Gemeinnutzlge Betriebs GmbH, Brenner Holding GmbH, Thomas Krauth and Michael Brenner.

OPINION

SAND, District Judge.

The Plaintiffs, Jim Jacobs and the Estate of Warren Casey, are the exclusive owners of all copyrights to the musical "GREASE," which Jacobs and Casey authored. (Am.Compl.¶ 14.) On November 13, 1992, the Plaintiffs licensed to Defendant Felix Bloch Erben Verlag fur Buhne Film und Funk KG ("Felix Bloch") the right to produce "GREASE" in German-speaking Europe, but in the German language only. (Id. ¶ 15.) The license was set to expire after three years and on November 13, 1995, the agreement was renewed through December 31, 1998. (Id. ¶ 42.) Felix Bloch sublicensed these rights to Brenner Holding GmbH ("Brenner Holding"), which was, at the time this action was commenced, partially owned by Defendant Michael Brenner. (Brenner Decl. 6/15/1999 ¶¶ 1-2.) Thereafter, Brenner Holding transferred its "GREASE" rights to GREASE Promotion GmbH ("GREASE GmbH"), a company jointly owned by Brenner Holding and Thomas Krauth. (Id. ¶ 2.)

On September 18, 1998, the Plaintiffs filed this action alleging that Felix Bloch breached the licensing agreement and that all of the Defendants infringed the Plaintiffs' copyright because the play continued to be performed after August 11, 1998, when Plaintiffs allege that the licensing agreement with Felix Bloch was terminated. (Compl.¶¶ 59-72.) On June 18, 1999, the GREASE Defendants¹ moved for dismissal for lack of personal jurisdiction and on forum non conveniens grounds. (6/18/1999 Mot.) Following the submission of an amended complaint and the completion of briefing, the Court heard oral argument on January 27, 2000. At that time, the Court ordered jurisdictional discovery (limited to document discovery and the depositions of Defendants Brenner and Krauth) and deferred decision on the motion to dismiss until the completion of such discovery.² (Tr. at 30.) On February 15, 2001, after the Plaintiffs completed jurisdictional discovery, the Defendants renewed their motion to dismiss on the grounds that, under Rule 12(b)(2) of the Federal Rules of Civil Procedure, the Court lacks personal jurisdiction over them and, alternatively, that the doctrine of forum non conveniens justifies dismissal. (Mot.)³ In a declaration filed on March 13, 2001, Felix Bloch joined the GREASE Defendants' motion to dismiss on the grounds of forum non conveniens. (Satnick Decl.) On April 20, 2001, the Plaintiffs moved for leave to amend their complaint to add Sundance Productions, Inc. ("Sundance") as a defendant in the action. (Notice of Cross Mot.) These are the motions presently before the Court.⁴

For the reasons set forth below, the GREASE Defendants' motion to dismiss for lack of personal jurisdiction is granted. Defendant Felix Bloch's motion to dismiss for forum non conveniens is denied. Plaintiffs' motion for leave to amend the complaint to add Sundance Productions as a party is also denied.

I. FACTS

A. Background

Plaintiff Jim Jacobs is a resident of California. (Am.Compl.¶ 4.) The Estate of Warren Casey is administered by the Harris Trust & Savings Bank, of Chicago, Illinois. (Id. ¶ 5.) Felix Bloch, GREASE GmbH and Brenner Holding are corporate societies organized under German law and with their principal places of business in Germany. (Id. ¶¶ 6-9; Brenner Decl. ¶ 2.) Messrs. Michael Brenner and Thomas Krauth are German residents. (Am. Compl.¶¶ 10-11.)

The initial licensing agreement between the Plaintiffs and Felix Bloch was executed in New York and contains a choice of law clause, providing for the application of New York State laws. (Id. ¶ 16.) The sublicensing agreements, between Felix Bloch and Brenner Holding and between Brenner Holding and GREASE GmbH, were negotiated and executed in Germany. (Brenner Decl. 6/15/1999 ¶ 2.) To be clear, none of the GREASE Defendants has entered into any direct contractual relationship with the Plaintiffs. (Mot. at 3.)

The relationship among the various entities known as the GREASE Defendants and between the GREASE Defendants and two other non-party companies, Sundance and BB Promotion, is at the center of the jurisdictional inquiry. As of September 1998, at the commencement of this action, Defendant Michael Brenner owned 26% of the shares of Brenner Holding and BB Promotion and his wife held the other 74% of those companies.⁵ (Dietmann 6/1/2001 Decl. ¶ 8.) Brenner is also the sole shareholder of Sundance, a New York corporation. (Brenner 6/15/1999 Decl. ¶ 6.). Although he does not have a direct ownership interest in GREASE GmbH, which is jointly owned by Krauth and Brenner Holding,⁶ Brenner does serve as the Executive Secretary and Creative Director for GREASE GmbH. (Brenner 10/15/1999 Decl. ¶ 3.)

Defendant Thomas Krauth does not have any ownership interest in Brenner Holding, Sundance or BB Promotion and has never been an employee of those companies. (Krauth 6/1/2001 Decl. ¶ 2; Dietmann 6/1/2001 Decl. ¶¶ 6-7.) During the period between 1992 and 1995, Krauth did, however, perform consulting services for Brenner Holding and BB Promotion. (Id.) Krauth is a shareholder of GREASE GmbH and acts as the company's General Manager. (Krauth 6/15/1999 Decl. ¶ 1; Dietmann 6/1/2001 Decl. ¶ 7.) Like Krauth, GREASE GmbH and Brenner Holding do not own any interest in Sundance or BB Promotion. (Dietmann 6/1/2001 Decl. ¶ 6.) Finally, with respect to the relationship between Brenner and Krauth, while Krauth admits that on occasion he has used the term "partner" to let people know that he and Brenner have teamed up on certain projects, he claims that he has never entered into a legal partnership "pursuant to which profits and losses of a business were shared by us individually." (Krauth 6/1/2001 Decl. ¶ 3.)

GREASE GmbH, Brenner Holding, BB Promotion and Sundance are corporations that were separately formed and separately capitalized. (Dietmann 6/1/2001 Decl. ¶ 4; Brenner 6/1/2001 Decl. ¶ 3.) The German corporations, GREASE GmbH, Brenner Holding and BB Promotion were registered as independent corporate societies in the Handelsregister, a German corporate registry. (Dietmann 6/1/2001 Decl. ¶ 4.) GREASE GmbH, Brenner Holding, BB Promotion and Sundance maintain their own books and records, manage their own separate bank accounts and do their own hiring. (Brenner 6/1/2001 Decl. ¶ 4.) Brenner claims that he "always observed corporate formalities with respect to each of the these entities, never loaned any of these entities any funds, never interfered with their day-to-day operations, and never entered into a business transaction with any of these entities on [his] own behalf." (Id.)

The Plaintiffs challenge the assertion by Brenner that the corporations were strictly separate. In their response, they point out that some of these corporations share German addresses with other Brenner or Krauth affiliated corporations, although they do not appear to use the same phone number. (Schwartz Cert.App. K.) In addition, BB Promotion and GREASE GmbH share at least one management level employee. (Resp. at 14.) Finally, the Plaintiffs highlight numerous charges on receipts from the GREASE GmbH credit card which contain notations signaling that some of the charges on the card were Brenner's private charges or charges for BB Promotion. (See Schwartz Cert. Apps. C, D, E.) The Defendants argue that these notations — which read "privat" (private) or "weiter an BB" (pass on to BB) — were made so that inadvertent charges could be passed on to the appropriate entity. (Brenner 6/1/2001 Decl. ¶ 7.) According to Brenner, these charges were generally reimbursed "within a month of the inadvertent charge." (Id.)

The Defendants characterize the primary business of GREASE GmbH and Brenner Holding as "the production of plays in Germany and other countries in Europe." (Brenner 10/15/1999 Decl. ¶ 12.) In the case of "GREASE", however, Brenner Holding was not involved with the actual production of the musical and, instead, sublicensed its rights to GREASE GmbH, which produced the Musical in Germany and Switzerland. (Id. ¶ 3.) BB Promotion has promoted a wide range of different shows in Europe and characterizes itself as a "leading theatrical organizer." (Brenner Dep. at 29-30.) Despite Plaintiffs' claims to the contrary, BB Promotion is not dependent on Brenner Holding for the rights to the shows it promotes. From 1994 to 1999, for only four of the 32 productions to which BB Promotion obtained the rights were the rights obtained from Brenner Holding. (Brenner 6/1/2001 Decl. ¶ 5.) Sundance, the New York corporation, works primarily with BB Promotion to secure talent for the Harlem Gospel Singers. (Id. at 9.)

B. The GREASE Defendants' Contacts with New York — Generally

GREASE GmbH and Brenner Holding are not licensed to do business in New York and they conduct no advertising in New York. (Mot. at 3; Brenner 6/15/1999 Decl. ¶ 4.) They do not have New York offices, warehouses, or other real property. (Id.; Krauth 6/15/1999 Decl. ¶ 4.) None of the GREASE Defendants have telephone listings or bank or brokerage accounts in New York. (Id.) Brenner and Krauth also do not have New York residences, offices, telephone listings or bank accounts. (Brenner 6/1...